How Zappos’ Obsession with Customer Service Yielded Massive Returns

What better way to end the week than with a light read?

Today, let’s talk about Zappos, a successful American online shoe and clothing retailing company.

Being turned away from investors and borrowing money from friends and family. No one expected an online retailer from 1999 to be successful.

From dotcom bust to an acquisition by Amazon — here’s how Zappos became an internet juggernaut.

Founder Tony Hsieh was one of many internet entrepreneurs of the dotcom era. While companies like Amazon were successful in selling products with minimal variation (i.e. books), Hsieh decided to sell perhaps the most complex article of clothing to shop for: shoes.

The secret? An obsession with customer service.

Zappos was one of the first online companies to offer 60-day no-questions-asked refunds and exchanges. The approach gave customers an opportunity to try multiple shoe styles and sizes without worrying about payment.

While other companies looked at customer service as an operation needing efficiency, Zappos saw it as an opportunity to build trust with people.

Customer service representatives had no metrics on support length or time spent per claim.

In fact, the company was so obsessed with customer service that it relocated to Las Vegas. Sin City was not known to be a logistics hub — which was counterintuitive for a company striving for 60-day returns and 24-hour shipping.

But there was one thing Las Vegas had that others didn’t: a booming hospitality industry. Hsieh’s thesis was simple. Hiring hospitality industry workers would further boost excellent customer service without the need for rigorous training.

“We’d bet that by being good to our employees, we would be able to offer better service than our competitors. Better service would translate into lots of repeat customers, which would mean low marketing expenses, long-term profits, and fast growth.” -Tony Hsieh

Hsieh repeatedly expressed quality employees and customer service as differentiators.

His thesis was proven right. Zappos was recognized with a higher loyalty service rating than any of its peers. In 2009 Amazon acquired Zappos for $1.2B.

Here’s an example of how values impact business. Zappos’ interest in her employees and customers made profitability sustainable. This is brand culture at its peak.

Ultimately, your brand values and culture have longterm consequences in business.

  • What’s your brand culture?
  • How is it working for your business?

Kindly drop your reply in the comment section.

We are here to ensure you get things right.

Culled from Startup stories.

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